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In this paper we investigate the throughput performance of IEEE 802.11 distributed coordination function (DCF) in the presence of physical-layer (PHY) inequality, i.e. varied channel conditions and/or unequal data rates determined by the Link Adaptation (LA) scheme. We present a theoretical model for DCF protocol with the LA scheme of auto rate fallback (ARF). The analysis results show that the system throughput of DCF-based WLANs is determined by the lowest data rate used with stations; throughput sharing among stations depends on the variation of link qualities rather than the difference of data rates. The simulation results validate the accuracy of our analytical model.